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A Hidden Threat to Online Freedom: The Lost Balance of Fair Use and Intellectual Property

The current imbalance of our intellectual property system allows copyright law to strangle free speech and innovation. Ideally, the intellectual property system would strike a balance between the rights of the intellectual owner and those of consumer. Intended to support the property’s creator, copyright laws can promote fair compensation and allow for the continued creation of content. At the same time, intellectual property systems are designed so that after the creator is paid after the work enters the public domain and aids in the creation of new works. This balanced is threatened by the misuse and misunderstanding of the roles of copyright and fair use.

While content creators are an important beneficiary of intellectual property, the consumer is an equally (if not more) important consideration. In an effort to protect the consumer, restrictions are used to stop the IP owner’s expansion of power. Fair use and licenses of use are two important components of the intellectual property balancing act.

Trademark law requires a similar balance. Trademarks operate a bit differently than copyrights and patents. They benefit sellers of goods and services by allowing them to maintain their brand while also protecting consumers by ensuring that they know what they are buying. Much like IP’s balance between owner and consumer rights, with trademark law, a balance should exist between the marketplace and the consumer. Trademarks and intellectual property have the same end goals of ensuring fairness while fostering innovation. Both systems, when they work, are engines for creativity.

The terminology used in conversations surrounding intellectual property law is a bit complex. Thanks to the courts, the media, and superstar artists, there is particularly a great deal of confusion surrounding the doctrine of fair use. Fair use was not designed for the sole purpose of declaring exemptions from intellectual property laws. Fair use is an articulation of how copyright law can and cannot be used. By expressing these boundaries and preventing copyright owner overreach, fair use is a critically important part of a balanced intellectual property system.

A license of use can operate independently of actual ownership. Underscoring the absurdity that often results from these distinctions, FreedomWork’s Dr. Wayne Brough pointed out John Deere’s comment to the Copyright Office, which stated that farmers that farmers do not own their tractors; rather, they simply have “an implied license for the life of the vehicle to operate the vehicle.”

Unfortunately, the system of intellectual property has been thrown out of balance by increasingly frequent cries of “infringement.” These unproven (and often unfounded) allegations are enough to kill a startup, shut down a website, derail a patent application, take down an internet video, and the development of a new product.

As the Electronic Frontier Foundation (EFF) has explained, intellectual property owners use allegations of infringement as a sort of veto. It is a veto on the less powerful content creators and product developers who abandon their efforts when threatened with a lawsuit that could result in years of expensive and progress-stopping litigation. Through these threats, infringement cries can also veto the creation of the most innovative startups and biggest technological advancement. In effect, the “infringement veto” is a veto on new technology and the free market.

“Crying wolf” by crying “infringement” has a chilling effect on creativity, free speech, and innovation. Perhaps infringement accusers need to be told that they can’t cry wolf because somebody has already done that. Otherwise, intellectual property owners will need to realize that infringement threats are ill-suited for the digital age.

FreedomWorks’ Digital Bill of Rights would help restore the balance between content owners and those of us trying to create new products and spread new ideas. A Digital Bill of Rights would preserve the right to freedom of expression online and allowing for the existence of a robust public domain to foster creativity and innovation.

A Digital Bill of Rights would not only extend to the online world our protections established by the Constitution, it would also extend the freedoms of creation and expression that we enjoyed in years past into the digital era. The full text of FreedomWorks’ Digital Bill of Rights can be found here.

Last week, a federal judge issued a preliminary injunction halting the implementation of President Obama’s new overtime regulations. The regulations, previously scheduled to take effect on December 1st are a declaration of war on job flexibility and small employers, imposing new compliance costs and limiting employment arrangements in pursuit of big government social engineering. Given the large costs and dubious benefits, the Obama administration’s justifications for these massive, expensive, meddling regulations were always suspect as policy matter, but now a federal judge has agreed with the 21 states challenging the regulations and recognized them as probably illegal as well.

Yesterday, the US Court of Appeals for the DC Circuit officially ruled that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional, a criticism that has been leveled at the agency since its creation in 2010. The court found that so much unaccountable power was concentrated in the person of the director of the CFPB that it could not pass constitutional muster. Under the court’s ruling, the director now will be removable at will by the president, just like the head of any other agency. This represents an important blow for the system of separation of powers enshrined in the US Constitution.

American freight rail, while largely deregulated, is still overseen by the Surface Transportation Board (STB). This federal agency retains substantial power to regulate freight rail, powers that the STB normally deploys rarely. But these powers are seen by some as an opportunity to enlist the power of the federal government in business disputes, using government to extract rents to pad bottom lines. An example of this can be seen in the proposed “reciprocal switching” regulations from the STB. Unable to prove that prices that railroads are charging are unfair, some of their shipping customers have gone to the federal government to try to force lower prices through regulation, regulation which has been described as backdoor price controls.

On Tuesday, the Obama administration’s attempt to seize control of the nation’s energy infrastructure faced its latest day in court before the Court of Appeals for the D.C. Circuit. The so-called Clean Power Plan (CPP), which would more accurately be described as the Creating Poverty Plan for its increased energy costs that fall hardest on poor Americans, is the centerpiece of President Obama’s global warming agenda. It seeks to impose massive regulatory costs on the nation’s economy in order to supposedly prevent less than 0.02 degrees of temperature increase by 2100.

On Wednesday, House Oversight Committee Chairman Jason Chaffetz (R-Utah) singled out StingRay scanners, stating that the committee is set to investigate these devices and their use in government surveillance. While mired in technical language, this is an issue of importance to all Americans.

Last year the Fish and Wildlife Service announced that the greater sage grouse did not qualify for coverage under the Endangered Species Act (ESA),perhaps because the observed numbers of male grouse had increased by 63% from 2013-2015. This decision was met with relief across the western United States, where livelihoods were threatened with destruction by draconian ESA regulations. But regulators can never be content with not regulating, so last week the Department of Interior (DOI) announced new guidelines to restrict economic activity in the name of protecting the grouse.

There is an agency in Washington that spends over $7 billion per year and employs about 60,000 people nationwide, yet fails to do its one job 95% of the time when tested. Nearly half of the agency’s employees have received complaints for misconduct in the last three years. Private companies providing the identical services are 65% more efficient while costing taxpayers less money.

Have you noticed how the price of electronics and appliances like TVs, refrigerators, computers, or cell phones have been continuous declining as a result of technological progress, but the cost of new cars has been increasing? This is not some special quirk of the car market; it is the result of a deliberate policy by the federal government, prodded by radical environmentalists, to increase the cost of purchasing a new car. One of the chief mechanisms for this war on affordability are Corporate Average Fuel Economy (CAFE) mandates, which cost consumers tens of billions of dollars per year. Punishingly high CAFE standards have become a weapon of choice for radical leftists in their efforts to dictate how Americans must live.

On August 22, the comment period closed on the Consumer Financial Protection Bureau’s (CFPB) new proposed rule seeking to outlaw arbitration agreements for consumer financial products. Leading the opposition to the unnecessary and overreaching rule, FreedomWorks Foundation generated nearly 15,000 responses opposed to the rule.